Regardless of your age, estate planning is an important and necessary part of life. Beginning the process early may help ensure your loved ones are always taken care of.
Doing it wisely may even lead to reduced estate taxes, avoidance of probate and overall less complication for your heirs. One vital task you need to complete is designating who has the power of attorney.
What is it?
It is a document that legally grants someone the right to act for you in certain situations. It allows the person to make financial decisions on your behalf in the event that you become mentally and/or physically incapacitated, though the authorization may also become active even if you are perfectly capable. It does not take away your right to continue managing your own affairs, only lets your chosen individual do so as well.
When does it end?
The powers afforded by a power of attorney usually cease upon your death or the expiration date if there is one. You may also revoke it if you wish to.
What are some of its limitations?
There are actually two kinds with regards to rights, general and limited. The former gives the person much more power and freedom, while the latter only allows the specific actions outlined in the document. It may also be durable or springing, meaning it becomes effective upon completion or you becoming incompetent respectively.
Power of attorney is significantly more complex than the brief overview presented here, but these are the basics. It is not the same as guardianship. You may also make your agent the executor of your will if you wish to do so.
